SPX's (S & P 500) Short Term Wave C Downcycle Since 11-5-08 Might Bottom Tomorrow
SPX's (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx) short term Wave C downcycle since 11-5-08 might bottom tomorrow 11-13-08, see http://finance.yahoo.com/q/ta?s=%5Espx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=, and, note that SPX put in a large bearish spike shortly before session's end.
SPX (and other indexes/sectors) will probably take out it's 10-10-08 cycle low at 839.80 tomorrow, confirming that it remains in a Cyclical Bear Market since 10-11-07.
Looking at the broad market 5 day intraday Walmart (WMT) Lead Indicator (+1.20% versus SPX today/on 11-12, +1.42% on 11-11, +2.72% on 11-10, -1.21% on 11-7, +3.85% on 11-6, +1.71% on 11-5), see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC, the fact that it's extremely bullish is a very short term bearish sign, that points to early weakness tomorrow.
However, after early weakness, a substantial rally is likely due to today's very bullish Walmart (WMT) Lead Indicator, at +1.20% versus SPX today/on 11-12, the fact that SPX will be extremely oversold, and, the extreme volatility is a sign that an important cycle low (could be a Cyclical Bear Market cycle low) is imminent.
Some type of important cycle low might occur in the next few days, because, SPX (S & P 500) is doing (assumes 10-10-08 cycle low is taken out) a month long Elliott Wave ABC down up down downcycle, see http://stockcharts.com/charts/gallery.html?%24spx.
Early tomorrow I'll look to day trade the XOI (AMEX Oil and Gas) ultra short via DUG, then, after the (if the) market bottoms I'll look to trade DIG or GDX/AEM long. Today I day traded DUG and netted 47 cents/$470 for each 1000 shares traded.
DUG had an upside gap at 41.50 (filled today 11-12). The XOI (AMEX Oil and Gas) had a downside gap at 900.39 (filled 11-11), and, has an upside gap at 952.76. XOM (Exxon Mobil) has downside gaps at 69.96 (filled today 11-12) and 66.09, and, has an upside gap at 77.49.
Also, note that DUG has a large bullish inverse spike on 11-5's bullish white (close above the open) candle, see http://stockcharts.com/charts/gallery.html?dug, which is a bullish double bottom with 11-4's cycle low at 33.83, that appears to be a major intermediate term cycle low (see second chart at http://stockcharts.com/charts/gallery.html?dug), because, DUG completed a huge three week+ Elliott Wave ABC down up down downcycle (inverse Elliott Wave 12345 pattern = down up down up down). Nothing I discuss on this Blog is a recommendation.
It looks like GDX (Gold Miners ETF) will fill it's downside gap at 18.69 early tomorrow, and, the gold sector (GDX/HUI/XAU, http://stockcharts.com/charts/gallery.html?gdx) probably entered a Cyclical Bull Market recently, but, has yet to hit a 5% follow through major buy signal. GDX's recent likely Cyclical Bear Market cycle low is 15.83.
The fact that the NEM Lead Indicator (+2.74% on 11-12, +1.72% on 11-11, +0.97% on 11-10) has turned extremely bullish the past few days, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem, plus, assessing the GDX/HUI/XAU(http://stockcharts.com/charts/gallery.html?gdx) charts/cycle patterns (HUI very bullish triple bottom, NEM double bottom at 21.40/21.47), it looks like the sector has bottomed, which obviously doesn't mean that ALL stocks in the sector have bottomed.
The current dramatic weakness makes perfect sense cyclewise. After doing a huge short term Wave 1 upcycle (http://stockcharts.com/charts/gallery.html?gdx), GDX/HUI/XAU are doing a huge short term Wave 2 downcycle, such that the Wave 3 Cyclical Bull Market's uptrend line begins relatively flat.
An SPX short term Wave C downcycle began on 11-5-08, see http://stockcharts.com/charts/gallery.html?%24spx, in which SPX (S & P 500) should take out it's cycle low at 839.80 that occurred on 10-10-08, confirming that SPX and most other indexes/sectors remain in a Cyclical Bear Market.
The gold stock sector (GDX/HUI/XAU) is one sector that clearly APPEARS to have bottomed, see http://stockcharts.com/charts/gallery.html?%24hui. HUI has a nice very bullish triple bottom. Reliable lead indicator NEM recently put in a nice bullish double bottom at 21.40/21.47, see http://stockcharts.com/charts/gallery.html?nem. Waiting for a 5% major buy signal makes a lot of sense obviously.
In the next few days to a week, SPX/NDX/RUT and most other indexes/sectors will probably take out their recent lows (10-10-08 for SPX and the XOI). The lead indicators jive with severe weakness (began 11-5-08), for most sectors/indexes.
The 5 day intraday broad market Walmart (WMT) Lead Indicator is extremely bullish (which is very short term bearish, +1.20% versus SPX today/on 11-12, +1.42% on 11-11, +2.72% on 11-10, -1.21% on 11-7, +3.85% on 11-6, +1.71% on 11-5, -3.79% on 11-4, +0.54% on 11-3, +0.40% on 10-31, -3.07% on 10-30, +0.84% on 10-29, +0.28% on 10-28, -0.19% on 10-27), see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC.
The 5 day intraday gold sector NEM Lead Indicator is extremely bullish (which is very short term bearish, +2.74% versus the XAU today/on 11-12, +1.72% on 11-11, +0.97% on 11-10, -1.54% on 11-7, +0.13% on 11-6, -0.62% on 11-5, -4.40% on 11-4, -0.25% on 11-3, -1.11% on 10-31, +2.34% on 10-30, -12.86% on 10-29, +9.90% on 10-28, -0.40% on 10-27), see http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=l&q=l&p=&a=&c=%5Ehui,nem.
The 5 day intraday oil and gas sector XOM (Exxon Mobil) Lead Indicator is extremely bullish (which is very short term bearish, +2.39% versus the XOI today/on 11-12, +2.23% on 11-11, -0.53% on 11-10, +0.65% on 11-7, +0.44% on 11-6, -0.23% on 11-5, -2.49% on 11-4, +2.41% on 11-3, -3.01% on 10-31, -3.26% on 10-30, -3.62% on 10-29, -0.45% on 10-28, +1.46% on 10-27), see http://finance.yahoo.com/q/ta?t=5d&s=%5EXOI&l=off&z=l&q=c&a=m26-12-9&a=p12&a=fs&a=w14&c=xom.
The GDX/HUI/XAU Wave 2 Cyclical Bear Market since mid March is probably/appears to be over (don't be shocked if it isn't), see http://stockcharts.com/charts/gallery.html?%24xau. GDX/HUI/XAU still need to hit a 5% major buy signal however, before Trade the Cycles indicates that they've very likely bottomed. This still could end up being the mother of all headfakes. Also, gold very likely hasn't bottomed.
Gold (http://stockcharts.com/charts/gallery.html?gld) lags GDX/HUI/XAU, and, will probably bottom at $500ish, maybe $450 or even lower.
Reliable gold sector lead indicator Newmont Mining (NEM) shot up a spectacular +22.89% on 10-28-08, see http://stockcharts.com/charts/gallery.html?nem.
It LOOKS LIKE (it obviously makes a LOT of sense to wait for a 5% follow through major buy signal) NEM PROBABLY put in a Wave 2 Cyclical Bear Market (since 1-31-06) cycle low just before 10-27's close at 21.40, which is a bullish double bottom cycle low with the previous session's cycle low at 21.47.
The GDX/HUI/XAU Wave 3 Cyclical Bull Market (might not have started yet) is likely to be a great one. Wave 3 upcycles tend to be large, relative to Wave 1 upcycles.
SPX (S & P 500) and the XOI (AMEX Oil & Gas) are probably still in a Cyclical Bear Market, see SPX at http://stockcharts.com/charts/gallery.html?%24spx, and, see the XOI at http://stockcharts.com/charts/gallery.html?%24xoi. Since cycle lows keep failing, one has to assume that's the case. SPX put in lower cycle lows in five consecutive sessions recently.
The NASDAQ 100 (NDX) is probably still in a Cyclical Bear Market, see http://stockcharts.com/charts/gallery.html?%24ndx, as are RUT (Russell 2000), see http://stockcharts.com/charts/gallery.html?%24rut, and, GDX/HUI/XAU might still be in a Cyclical Bear Market, see http://stockcharts.com/charts/gallery.html?gdx.
A Cyclical Bear Market began on 10-11-07 for SPX (S & P 500), began in late October 2007 for NDX (NASDAQ 100), and, began in late July 2007 for RUT (Russell 2000).
Please keep in mind that, after an index puts in a potential major cycle low, it has to hit a 5% follow through (after breaking the major downcycle trendline) major buy signal before the Trade the Cycles system indicates that a major cycle low has very likely occurred.
My original Trade the Cycles system uses the reliable Elliott Wave patterns (see the Trade the Cycles charts at http://www.joefrocks.com/GoldStockCharts.html) and maps them to cycles of various timeframes (an Elliott Wave is either an upcycle or a downcycle), from very short term (hours/days), short term (days/weeks), monthly (4-7 weeks), minor intermediate term (2-3 months), major intermediate term (3-12 months), long term (1 to 2 years), Cyclical Bull/Bear Market (6 months to 7 years, yes, a bull/bear can be relatively brief), Secular Bull/Bear Market (8-20+ years).
Gaps are very important also, since most gaps get filled and they often provide insight into when cycle highs/lows will occur.
.......http://www.JoeFRocks.com/
NEM XAU HUI
SPX (and other indexes/sectors) will probably take out it's 10-10-08 cycle low at 839.80 tomorrow, confirming that it remains in a Cyclical Bear Market since 10-11-07.
Looking at the broad market 5 day intraday Walmart (WMT) Lead Indicator (+1.20% versus SPX today/on 11-12, +1.42% on 11-11, +2.72% on 11-10, -1.21% on 11-7, +3.85% on 11-6, +1.71% on 11-5), see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC, the fact that it's extremely bullish is a very short term bearish sign, that points to early weakness tomorrow.
However, after early weakness, a substantial rally is likely due to today's very bullish Walmart (WMT) Lead Indicator, at +1.20% versus SPX today/on 11-12, the fact that SPX will be extremely oversold, and, the extreme volatility is a sign that an important cycle low (could be a Cyclical Bear Market cycle low) is imminent.
Some type of important cycle low might occur in the next few days, because, SPX (S & P 500) is doing (assumes 10-10-08 cycle low is taken out) a month long Elliott Wave ABC down up down downcycle, see http://stockcharts.com/charts/gallery.html?%24spx.
Early tomorrow I'll look to day trade the XOI (AMEX Oil and Gas) ultra short via DUG, then, after the (if the) market bottoms I'll look to trade DIG or GDX/AEM long. Today I day traded DUG and netted 47 cents/$470 for each 1000 shares traded.
DUG had an upside gap at 41.50 (filled today 11-12). The XOI (AMEX Oil and Gas) had a downside gap at 900.39 (filled 11-11), and, has an upside gap at 952.76. XOM (Exxon Mobil) has downside gaps at 69.96 (filled today 11-12) and 66.09, and, has an upside gap at 77.49.
Also, note that DUG has a large bullish inverse spike on 11-5's bullish white (close above the open) candle, see http://stockcharts.com/charts/gallery.html?dug, which is a bullish double bottom with 11-4's cycle low at 33.83, that appears to be a major intermediate term cycle low (see second chart at http://stockcharts.com/charts/gallery.html?dug), because, DUG completed a huge three week+ Elliott Wave ABC down up down downcycle (inverse Elliott Wave 12345 pattern = down up down up down). Nothing I discuss on this Blog is a recommendation.
It looks like GDX (Gold Miners ETF) will fill it's downside gap at 18.69 early tomorrow, and, the gold sector (GDX/HUI/XAU, http://stockcharts.com/charts/gallery.html?gdx) probably entered a Cyclical Bull Market recently, but, has yet to hit a 5% follow through major buy signal. GDX's recent likely Cyclical Bear Market cycle low is 15.83.
The fact that the NEM Lead Indicator (+2.74% on 11-12, +1.72% on 11-11, +0.97% on 11-10) has turned extremely bullish the past few days, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem, plus, assessing the GDX/HUI/XAU(http://stockcharts.com/charts/gallery.html?gdx) charts/cycle patterns (HUI very bullish triple bottom, NEM double bottom at 21.40/21.47), it looks like the sector has bottomed, which obviously doesn't mean that ALL stocks in the sector have bottomed.
The current dramatic weakness makes perfect sense cyclewise. After doing a huge short term Wave 1 upcycle (http://stockcharts.com/charts/gallery.html?gdx), GDX/HUI/XAU are doing a huge short term Wave 2 downcycle, such that the Wave 3 Cyclical Bull Market's uptrend line begins relatively flat.
An SPX short term Wave C downcycle began on 11-5-08, see http://stockcharts.com/charts/gallery.html?%24spx, in which SPX (S & P 500) should take out it's cycle low at 839.80 that occurred on 10-10-08, confirming that SPX and most other indexes/sectors remain in a Cyclical Bear Market.
The gold stock sector (GDX/HUI/XAU) is one sector that clearly APPEARS to have bottomed, see http://stockcharts.com/charts/gallery.html?%24hui. HUI has a nice very bullish triple bottom. Reliable lead indicator NEM recently put in a nice bullish double bottom at 21.40/21.47, see http://stockcharts.com/charts/gallery.html?nem. Waiting for a 5% major buy signal makes a lot of sense obviously.
In the next few days to a week, SPX/NDX/RUT and most other indexes/sectors will probably take out their recent lows (10-10-08 for SPX and the XOI). The lead indicators jive with severe weakness (began 11-5-08), for most sectors/indexes.
The 5 day intraday broad market Walmart (WMT) Lead Indicator is extremely bullish (which is very short term bearish, +1.20% versus SPX today/on 11-12, +1.42% on 11-11, +2.72% on 11-10, -1.21% on 11-7, +3.85% on 11-6, +1.71% on 11-5, -3.79% on 11-4, +0.54% on 11-3, +0.40% on 10-31, -3.07% on 10-30, +0.84% on 10-29, +0.28% on 10-28, -0.19% on 10-27), see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC.
The 5 day intraday gold sector NEM Lead Indicator is extremely bullish (which is very short term bearish, +2.74% versus the XAU today/on 11-12, +1.72% on 11-11, +0.97% on 11-10, -1.54% on 11-7, +0.13% on 11-6, -0.62% on 11-5, -4.40% on 11-4, -0.25% on 11-3, -1.11% on 10-31, +2.34% on 10-30, -12.86% on 10-29, +9.90% on 10-28, -0.40% on 10-27), see http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=l&q=l&p=&a=&c=%5Ehui,nem.
The 5 day intraday oil and gas sector XOM (Exxon Mobil) Lead Indicator is extremely bullish (which is very short term bearish, +2.39% versus the XOI today/on 11-12, +2.23% on 11-11, -0.53% on 11-10, +0.65% on 11-7, +0.44% on 11-6, -0.23% on 11-5, -2.49% on 11-4, +2.41% on 11-3, -3.01% on 10-31, -3.26% on 10-30, -3.62% on 10-29, -0.45% on 10-28, +1.46% on 10-27), see http://finance.yahoo.com/q/ta?t=5d&s=%5EXOI&l=off&z=l&q=c&a=m26-12-9&a=p12&a=fs&a=w14&c=xom.
The GDX/HUI/XAU Wave 2 Cyclical Bear Market since mid March is probably/appears to be over (don't be shocked if it isn't), see http://stockcharts.com/charts/gallery.html?%24xau. GDX/HUI/XAU still need to hit a 5% major buy signal however, before Trade the Cycles indicates that they've very likely bottomed. This still could end up being the mother of all headfakes. Also, gold very likely hasn't bottomed.
Gold (http://stockcharts.com/charts/gallery.html?gld) lags GDX/HUI/XAU, and, will probably bottom at $500ish, maybe $450 or even lower.
Reliable gold sector lead indicator Newmont Mining (NEM) shot up a spectacular +22.89% on 10-28-08, see http://stockcharts.com/charts/gallery.html?nem.
It LOOKS LIKE (it obviously makes a LOT of sense to wait for a 5% follow through major buy signal) NEM PROBABLY put in a Wave 2 Cyclical Bear Market (since 1-31-06) cycle low just before 10-27's close at 21.40, which is a bullish double bottom cycle low with the previous session's cycle low at 21.47.
The GDX/HUI/XAU Wave 3 Cyclical Bull Market (might not have started yet) is likely to be a great one. Wave 3 upcycles tend to be large, relative to Wave 1 upcycles.
SPX (S & P 500) and the XOI (AMEX Oil & Gas) are probably still in a Cyclical Bear Market, see SPX at http://stockcharts.com/charts/gallery.html?%24spx, and, see the XOI at http://stockcharts.com/charts/gallery.html?%24xoi. Since cycle lows keep failing, one has to assume that's the case. SPX put in lower cycle lows in five consecutive sessions recently.
The NASDAQ 100 (NDX) is probably still in a Cyclical Bear Market, see http://stockcharts.com/charts/gallery.html?%24ndx, as are RUT (Russell 2000), see http://stockcharts.com/charts/gallery.html?%24rut, and, GDX/HUI/XAU might still be in a Cyclical Bear Market, see http://stockcharts.com/charts/gallery.html?gdx.
A Cyclical Bear Market began on 10-11-07 for SPX (S & P 500), began in late October 2007 for NDX (NASDAQ 100), and, began in late July 2007 for RUT (Russell 2000).
Please keep in mind that, after an index puts in a potential major cycle low, it has to hit a 5% follow through (after breaking the major downcycle trendline) major buy signal before the Trade the Cycles system indicates that a major cycle low has very likely occurred.
My original Trade the Cycles system uses the reliable Elliott Wave patterns (see the Trade the Cycles charts at http://www.joefrocks.com/GoldStockCharts.html) and maps them to cycles of various timeframes (an Elliott Wave is either an upcycle or a downcycle), from very short term (hours/days), short term (days/weeks), monthly (4-7 weeks), minor intermediate term (2-3 months), major intermediate term (3-12 months), long term (1 to 2 years), Cyclical Bull/Bear Market (6 months to 7 years, yes, a bull/bear can be relatively brief), Secular Bull/Bear Market (8-20+ years).
Gaps are very important also, since most gaps get filled and they often provide insight into when cycle highs/lows will occur.
.......http://www.JoeFRocks.com/
NEM XAU HUI
Labels: DUG, GDX, Gold, Gold Stocks, HUI, NEM, RUT, Silver, Silver Stocks, SPX, XAU, XOI, XOM
posted by Joe Ferrazzano at
2:03 PM
3 Comments:
Apparently GM will run out of money in January, I don't know about Ford (F).
The House of Representatives is talking about a $25 Billion "bailout." The problem is that one can't bail out a dying patient. GM loses money on every car (I read) they make, and, is effectively a finance company in terms of the money they make selling each car. That root problem MUST be fixed. Huge additional job cuts and Union concessions almost certainly have to be made, I imagine.
Please tell/e mail your friends about this Blog. Thank you!
By
Joe Ferrazzano, at 7:45 PM
I urge you to write/e mail your Congress/Senate Representatives and President Elect Obama regarding the auto makers crisis. Thank you.
By
Joe Ferrazzano, at 7:47 PM
HUI/XAU entered a Secular Bull Market in November 2000/October 2000, versus gold doing so in April 2001 and silver doing so in late 2001, so, gold and silver will probably lag HUI/XAU again, and, will probably bottom in 3 to 6 months, silver maybe longer, assuming that HUI/XAU recently bottomed and entered a Wave 3 Cyclical Bull Market.
By
Joe Ferrazzano, at 11:06 PM
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